Six out of every ten businesses in Ghana fail to properly account for Value Added Tax (VAT). The Ghana Revenue Authority (GRA) revealed this significant compliance gap, impacting the nation's domestic revenue mobilisation efforts.
This widespread non-compliance means many businesses either do not register for VAT or collect the tax from customers but do not remit it to the government. Commissioner-General Anthony Kwasi Sarpong stated that only about four out of every ten businesses correctly charge and account for VAT. This situation represents a major challenge for the GRA in meeting its revenue targets.
The persistent issue of VAT non-compliance has long plagued Ghana's tax system, contributing to revenue shortfalls. This problem undermines the government's ability to fund essential public services and infrastructure projects. Data from the GRA indicates that informal sector businesses often pose the greatest challenge for tax collection. Improving VAT compliance is crucial for Ghana's economic stability and development agenda.
Commissioner-General Anthony Kwasi Sarpong confirmed these findings at the 14th Annual International Tax Conference 2026. He stated, "four out of every business in Ghana correctly charges VAT. The remaining six, they do not register. Or when they register, they collect their money and it doesn’t end up with government." This direct statement underscores the severity of the problem facing the Authority.
The GRA plans to combine advanced technology with more robust enforcement measures to tackle this issue. The implementation of the Fiscal Electronic Devices Act will require most businesses to use government-approved electronic devices for transactions. This new system aims to give the GRA real-time visibility over economic activity and VAT amounts due. The Authority expects this technology to significantly improve monitoring and reconciliation of VAT collections.
However, Mr. Sarpong cautioned that technology alone would not solve the problem. He noted that a pilot programme for the new devices already showed businesses attempting to bypass the system. He explained, "The pilot we are undertaking is telling us that when our officers are on the field, the machine is working. As soon as we leave the shop, the machine stops working." This highlights the need for continued vigilance and strong human oversight.
The GRA's strategy involves a dual approach: deploying technology alongside intensified compliance checks. This combination seeks to ensure businesses accurately account for VAT and remit collected funds. The success of these measures will directly impact the government's ability to increase tax revenue. Increased revenue is vital for Ghana's fiscal health and its capacity to invest in national development.
Improved VAT compliance could significantly boost Ghana's domestic revenue. This would reduce reliance on external borrowing and enhance fiscal self-sufficiency. Businesses that fail to comply face stricter penalties and increased scrutiny from tax authorities. The GRA's actions signal a more aggressive stance against tax evasion and avoidance. This move is critical for creating a fair and equitable tax environment for all businesses operating in Ghana. The Authority's commitment to combining technology with enforcement is a clear signal of its determination to close the VAT compliance gap.